In the most recent years, the importance of managing inventory in the form of raw materials to the industries has expanded, marking a need to design a new warehouse for inventory management (Ackerman, 1997). Today, it is a requirement for industries to enhance each of their activities with a very effective manner. The optimization of managing raw materials inventory is concerned to smooth material flow with the internal activities of the industries. Therefore, the purpose of this project is to design a layout for new incoming inventory warehouse, which smoothens raw material distribution along the manufacturing shop floor and improves flow in production.

For this purpose, a case-study was carried out in one of the sheet metal manufacturing companies at Jönköping, Sweden. During the investigation in the company, data collection techniques utilized for gathering the required information are interviews and observation. Later, the gathered information is analyzed by relating them with the subject of the theoretical background, which mainly include warehouse management, warehouse processes, storage method, ABC Analysis and Lean production.

By reviewing the information from literature search and case study, initially the drawbacks of current situation in the company are determined. Later, the layout design for a new incoming inventory warehouse is suggested based on the appropriate features, to smoothen the material flow in the shop floor and finally concluded with suggestions for future research.